Investment Articles

Knowing and understanding your risk tolerance is a part of figuring out your investment style. There are a number of other factors to consider apart from your risk profile and these are your age and your investment time frame.

The sort of investing that you do will depend on your goals and your need for either income or growth. It is also dependent on your understanding of money matters and the time that you are able to devote to your investment strategy. There are different questionnaires that will help you identify your personal tolerance to risk.

I have seen it written online that saving for retirement in your twenties means taking on a conservative or moderate style of investing but I disagree with this. If you are 20 and saving for retirement you will have about 45 years to invest and to my mind you can afford to take on more risk as you have a longer period to recoup losses. You are also more likely to be investing by drip feed which can be beneficial with the concept of dollar cost averaging — a 20 year old can be more than a conservative investor. After all a conservative investor wants to keep their initial investment intact — if $5000 is invested they want to make sure that they get that back.

By the same token I have seen articles suggesting saving for a house in a year or two and taking on an aggressive approach to investing. This to me is madness as in the short-term share markets are very volatile and you could lose your deposit when you need it most. To my mind this would be a speculative style of investing.

An aggressive investor is willing to take risks that others wouldn’t be willing to take and invest larger sums of money in riskier strategies in the hope of achieving higher returns. An aggressive investor will often have most of their investments tied up in the share market.

For those approaching retirement it is more likely that your style would be changing from an aggressive, balanced or moderate investor to one that is more conservative, or even defensive. This is a time in life where you will want to start conserving your money for the years ahead and your funds to be there to cover your living expenses. This does not mean investing totally in income bearing investments because everyone needs a component of growth to ensure that their funds keep up with inflation.

If you are unsure about figuring out your investment style and the places you should invest it would be worthwhile speaking to a Financial Planner.

Lyn Bell has been in the finance industry for more than 30 years and is a Certified Financial Planner. She has helped many clients achieve their financial goals. Sign up to get Lyn’s free newsletter SoundFinance News and receive a free gift.

A disclosure statement is available free on request.

In the world of investments, there are soft asset investments which are things such as cash and bank documents and there are hard asset investments such as land or gemstones. Hard asset investments are those tangible investments that can be held or touched, that are right there in front of you. If you are considering investing in gemstones, it is wise to consider that such an investment is not one for a fast return, but more of a long term investment. Gemstones are first and foremost a hobby or a collector’s item to be enjoyed. It takes quite a few years for gemstones to appreciate and rise in value to provide a significant return on your initial investment.

Gemstones are gaining in value these days due to the fact that the supply is limited, for many mines have been depleted of their assets. As a result, the prices of gemstones have risen steadily, for they always maintain their worth as time goes on. If you enjoy precious gems, enjoy looking at them and collecting them, investing in gemstones might be a place to put some of your interests. Gemstones can be collected raw and uncut or they can be cut, polished and mounted in various pieces of jewelry.

Buying gemstones that are rough and uncut is the best way to get the most for your money. If you take those rough gemstones and have them cut and mounted into beautiful pieces of jewelry, they will bring a much more lucrative return than just selling them as uncut gems. The market for rough, uncut gems is bigger than the market for gorgeous jewelry, so a buyer for the jewelry might take longer to find. But it is definitely well worth the wait, for gemstones done this way do bring more return on the investment. More cash up front.

Most of those people who are investing in gemstones are collectors. They enjoy looking at their gemstone collection and enjoy showing it off to others as well. Gemstones are not an investment opportunity for the get rich quick set, but more of a long term investment for a collector who wants to enjoy his or her investment. That being said, over a period of years, the gemstones do appreciate and will bring about a nice profit eventually. This is evident most of all at estate sales when survivors decide to sell Great-Uncle Harry’s private gemstone collection that has appreciated over time and brings a nice sum to the estate.For more information on investing in investment opportunities usually or normally not found in the marketplace, click here!

Sean Johnson is an Investment Advisor for http://www.inquest.biz an Investment Referral Service for investors requesting information on specific investments.

If you’re a professional investor then you’ll probably be thinking about diversifying your investment portfolio. Professional investors look to invest between 2 and 3 times a year, and with under performing markets, they need more options. Investors are therefore asking themselves, ‘Where can I put my money?’

Stocks and Shares

The first investment option that springs to mind for professional investors is stocks and shares. First of all, this is a tough environment and in order to see high returns you will be required to do a lot of work. Read the markets, understand your stock, buy low and sell high; all on a daily basis. If you were to invest in stock and leave it for ten years, it’ll probably just stay with the rate of inflation or gain up to 4%.

This can be a volatile market as well, with any political or economical permutation seriously affecting the market. For example, as a result of government spending cuts and the threat of a double dip recession, this was reflected in the stocks last year which on average were down 9%.

Property Investments

A popular one amongst investors and up until a few years ago would’ve been a recommended option for professional investors. However after a market crash and stagnant house prices, professional investors are seeking alternative investment options.

Professional investors want tangible assets, and whilst property is considered a popular tangible asset to have, it hasn’t performed well over the last couple of years. Again any political or economical permutation can seriously affect the market. Also this investment could cost a lot more than expected in terms of work, time and money. This is because there is duty of upkeep with property, for example, maintenance, utility bills and taxes.

Land Investment

Land investment has outperformed any other investment choice over the past 20 years. According to the The Royal Institute of Chartered Surveyors’ Rural Land Market Survey, UK land has seen a 130% increase in value over 20 years and a 30% increase in just the last year.

On average UK land for sale is seeing annual returns of 8% – 12%. One of the main reasons for this is because the high demand of UK land is in short supply. With the UK facing a population rise of 7 million by 2021, and with a shortfall of 1.4 million in affordable housing, it means land is becoming a sought after commodity.

This trend is seeing huge returns on land investment, and if an investor purchases previously undeveloped land which gains planning permission, the rewards are staggering. For example, in Birmingham, land without planning permission is worth 15k in comparison to land with planning permission which is valued at 240k.

With greenbelt land often being rezoned for development in order to manage the demands of housing, land values are seen as a consistent and safe tangible asset to invest in, which can see huge returns. Speak to a UK land investment firm to see how you can take advantage of this investment option.

Daniel Martin is a freelance writer who writes for a number of UK businesses. For advice with Investing in Land, he recommends Vinci Partners.

In this tumultuous economy there are many unconventional methods of making a profit including investing in tax lien certificates. With so many foreclosures occurring all over the country, these are becoming increasingly lucrative and safe ways to make a profit. There are several reasons to consider branching out your investment portfolio with this method.

One of the allures of purchasing tax lien certificates is that there is generous collateral in the case of a default on payments. If the owner of the property fails to make the required payment (which includes the interest that can potentially increase after the initial year) the certificate holder may have the right to the property or to the profit made at an auction. Sometimes these foreclosures can happen quite suddenly and you might see a very large return on a small initial investment.

While a bit more of a risky endeavor, if you are seeking to buy your own home, tax lien certificates can be an inexpensive option. In the very least you will end up with some interest on your investment, but with so many foreclosures happening across the country, it is not all that unusual for property owners to simply walk away, leaving their property for the lien holder to collect. Yes, you can actually buy a house for the cost of any outstanding taxes. It isn’t the wisest reason to go into collecting these types of certificates, but it certainly has been done successfully before.

Great profits can be had through purchasing these types of certificates, but there are also some risks involved. Don’t rely on this method as your own only investment. While it is a great way to diversify and take a chance for some big returns, there are also some sluggish interest rates. When choosing tax lien certificates, you receive little information about the property itself and may be going by a few pictures or just a simple description. A crumbling shack in the middle of nowhere that isn’t worth the materials it took to build it is certainly not going to make a good financial investment. Probably the biggest mistake any first time investor makes is buying a lien on a property that is vacant and overall useless. In these cases, the government often can’t be bothered to foreclose and the owners don’t care enough to pay the tax, leaving you stuck with nothing.

To help you make better choices, learn a bit about the real estate and property market in the area that you are considering purchasing tax lien certificates. Check the foreclosure rates as well as how many homes are selling. If your ultimate goal is to get properties that are on their way to auction to turn a quick profit, it won’t be very helpful is no one is currently buying real estate in the area. Many states also have highly variable interest rates and regulations regarding what you are entitled to as the certificate holder, so a bit of research will be invaluable.

If you are interested in tax lien certificates you should consider the assistance of professionals to help you with decision making. To learn more, visit: http://www.civicsource.com/

Startup companies come and go. In this fast paced society, only the strong and well-funded survive. A start-up company is just what it says, a company that is just in its beginning phases. Realize that while investing in these companies can be lucrative for investors, it can also be quite risky. Many companies fail within the first year, whether traditional bricks and mortar companies or online ones. Unfortunately, there is no way to tell on paper which ones will succeed, which ones will fail and which will make you the next dot com millionaire.

Investing in these companies can be done alone, as the primary investor or as a silent partner. This, however, requires you to have your eyes and ears open and to be actively searching out people who have a great idea or invented a unique product and want to start a business. Unfortunately, it also requires you to know where to look, which can be labor intensive. As an investor, you may have a day job and not have time to do hours of research and legwork just to find your next deal.

Many investors choose instead to work with venture capital groups. A venture capital group or a venture capital company pools the money of several investors together to fund the next big idea. It also allows you to invest in more expensive companies by joining several other investors. More importantly, working with other venture capitalists gives you access to a fund manager, who does all the research, negotiations and analysis in order to protect your money and ensure that it is invested in a sound business. Do not just hand your money over to the fund manager. Study each suggestion well and do your own research.

In the excitement of the dot com boom several years ago, some investors got caught up in the frenzy and invested their money in startups destined to fail. Usually, members of venture capital groups have the same goal for the future, to get in on the ground floor of a company and reap the rewards.

Investing in these type of business also requires patience. Waiting until a company turns a profit can happen immediately but, more likely, will take many years. Pulling out your support too soon can rob you of unexpected profits; yet, pulling out too late can cause an investor to lose their initial investment. And, while it is possible to fund a startup on your own, investors should stick with the convenience and relative safety of a venture capital group for their investment strategy.For more information on investing in investment opportunities usually or normally not found in the marketplace, click here!

Sean Johnson is an Investment Advisor for http://www.inquest.biz an Investment Referral Service for investors requesting information on specific investments.

Hedge funds are investment funds that are managed by an investment manager or broker. Private money is pooled together and invested according to a specialized strategy that takes the group members goals and preferences into consideration. For example, if the group prefers to be aggressive about making money, then the investment manager may invest in companies or assets that come with higher risks but offer higher payouts. These funds are generally limited to a small group of people and have a minimum investment amount of at least $10,000. This begs the question of whether investing in hedge funds is right for you.

The first thing you should know is that to even take part in most of these funds, you must be an accredited investor. This means you have to have over $1 million dollars in assets or at least $200,000 in annual income. Since the minimum investment is so high, this is likely to ensure that you won’t be spending money you don’t have. Hedge funds are high risk investments and it is very possible that you will lose every penny that you put into the fund. Therefore you should never be investing in these funds with money you can’t stand to lose.

But with that high risk come the possibility of high returns. Some funds return as much as 20% a year depending on the strategy of the fund manager. If you are looking to make money fast then investing in these funds is certainly one way you can do it. However, you must be certain that you are working with a fund manager who is knowledgeable and experienced in the market. All it takes is one bad deal to send your money down the drain. Take the time to thoroughly investigate the person handling the fund until you are certain they know what they are doing.

Investing in hedge funds is also very costly. In addition to your initial investment, you will also be paying the fund manager a fee for every year they manage the fund. That fee can be anywhere from 1.5% to 20% of the gains made in the fund. On top of that, you must agree to be a part of the fund for a contracted length of time, typically one year. This is to avoid any losses that may result from members pulling their money out and forcing the fund manager to sell assets at a loss. Learn all you can about hedge funds to determine if it is the best investment option for you.

Sean Johnson is an Investment Advisor for http://www.inquest.biz an Investment Referral Service for investors requesting information on specific investments.

The biggest reason small businesses fail is not for lack of solid business understanding, or market demand, or even mismanagement. The biggest reason they fail fail is undercapitalization. The reason is simple: starting a new business is overwhelming. There are so many things to figure out, usually in a very short period of time. Unexpected and unknown expenses can whittle away any initial investment capital. One important consideration that many new owners fail to calculate into the startup budget is their own burn rate. Very few can expect to see a major influx of clients or customers from day one.

The burn rate of a startup business is simply the amount of cash burned through each day, week, or month, while gaining those all important clients, customers or contracts. Whether or not customers or clients call, the phones must be in service. The office must be maintained at a comfortable temperature even if no one shows up to. Landlords do not care if you expect to double your cash flow next month when your business starts taking off, they want the rent paid now. Your suppliers or vendors are not usually in business to front you, either.

By far, the biggest portion of the burn rate goes to employees and their benefits. You cannot do without the employees you need to get off the ground running. As a business owner, you cannot take over every role and wait to fill the most important positions later. Customers, clients and contractors buy into your people. As a owner, investing in small business means adequate staffing from day one. Your customers and clients will hesitate if your office is staffed only by one overworked employee because she is all you can afford right now. To gain the business, you need to display that you are ready on every angle, employees included.

While investing in small business is considered a gamble, it does not hurt to look around and research a business for investment consideration. The first thing you should do is ensure that the business is simply undercapitalized rather than based on an unsustainable profit model that will keep them in the red for years to come. You may be surprised at how little money it takes to save a properly set up a business from extinction. Many of them close down over an unbelievable sum. If you roll up sleeve and spread your investment dollars wisely, this investment can pay off in spades.

Sean Johnson is an Investment Advisor for http://www.inquest.biz an Investment Referral Service for investors requesting information on specific investments.

Financial management is learned early in life. Since we live in a world that encourages us to keep spending, how can you teach your children the value of saving for the future? Talking about money is a good start, but these concrete steps will help to start your child out right.

Change Your Allowance System – Good money management starts with an allowance. Most parents give set allowances every week but your child will benefit from a different system. Set a base amount that your child can earn for meeting basic expectations. Then, create a list of additional chores or school goals that can earn extra money. Include both smaller and larger items to encourage your child to attempt something extra every week.

Create a Budget – Once your child starts earning an allowance, sit down together and set up a simple budget. While children will eventually be able to handle written budget, start with something more visual. Set up a different container for each category. Have your child label and decorate these containers then divide his or her allowance between them right away each week.

Hold Back on Gifts – While parents use holidays and birthdays to give things that their kids have been begging for all year, this may not be the best idea. Instead, use those wanted items as an opportunity to encourage saving. The more your child wants something, the more likely they are to set up a savings plan on their own. If you want to help out, give a small gift card instead.

Start a Bank Account – Most banks allow children to start a passbook account with a small initial investment. If your child has saved up enough money at home, take him or her to the bank to start long-term savings. Make a rule that money going into the bank stays there. If your child budgets for their savings account each week, they will have a nice nest egg to start their adult life.

Allow (Small) Mistakes – The most valuable lessons a person can learn come from their own choices: good and bad. If your child doesn’t follow the budget or takes money out of savings for junk food, let them make the mistake. Then, use it as an opportunity to talk about the consequences of bad money decisions. Do not punish children for a wrong choice but don’t bail them out either.

Jay. O is the CEO and Founder of My Child’s locket the leader in secure storage of your family’s emergency information, accessible on the web or on your phone whenever you need it. My Child’s Locket is based and was founded in 2008 in the metropolitan area of Dayton, OH. Its state of the art secure web site http://www.vitallocket.com offers secure storage of your family’s emergency information. Become a fan on Facebook http://www.facebook.com/VitalLocket

The key difference between an investor and a market trader is that investors are in it for the long haul while traders are in and out of the market. While their methods are different, the market risk they both face is the same. Since both are equally at the mercy of the gyrating market, which of the two is better equipped to come out a winner at the end?

Investors put down their money in a “safe” mutual fund, a “blue chip” stock or “government-backed” security. They let their investment ride the ups and downs of the market until such time when they wish to redeem it. The last few years have proven that a “safe” mutual fund can drain thousands in management fees, a “blue chip” stock can get hammered with equal viciousness by the market as any other stock. And “government-backed” securities can quickly lose their lustre in a raging recession.

If choosing an investment vehicle is hard, holding it for the long term, as they have been told by their brokers and the media, is harder still. “Buy and hold” is a platitude in turbulent economic times, when you are left holding a third or a quarter of your initial investment. Worse still, this method takes a great psychological toll from risk-averse investors.

When their investment starts to go down in a bear market, they watch from the sidelines, hoping the trend will reverse and they will recoup their paper losses. They worry and fret, but are afraid to pull out their investment as that would crystallise their loss. Their only recourse is to pray and wait, and spend sleepless nights, worrying.

Most people find themselves in this predicament because they have been told that investing is for prudent people and trading is for gamblers. Unfortunately, this teaching has forced thousands of investors to lose millions of dollars.

The stereotypical image of a stock trader is one of an opportunistic shark, who darts in and out of the market. In reality, the trader is like a leopard stalking a prey and waiting for the right time and place to make the kill. While there are indeed some traders who day trade, there are others who are short, medium or long term traders. In fact, trading can be tailored to fit the personality and time horizon of the trader.

The major difference between the trader and the investor is that the former has a plan for both bull and bear markets, knows his entry triggers and has his exit strategy in place before he invests his money. A trader has a simple goal to make as much profit as the market can give him. For him, all stocks and securities are fair game. As long as he sees an opportunity for profit, he gets into and out of the market.

A trader must be alert and keep his eye on the market constantly to look for opportunities. This requires knowledge, patience and quick decision making skills. It takes some time to imbibe counter-intuitive skills like shorting a stock in a bear market. But these are skills worth learning and investing your time in. After all, if at the end of the day, you can profit from any market, it doesn’t really matter whether you call yourself a trader or an investor.

Jacob Sayed is a marketing communications professional, an award winning commercial copywriter, scriptwriter and freelancer. He writes on a variety of subjects as diverse as marketing, finance, investing, health and sports. You may contact him at jacob.sayed@gmail.com.

No one will give you any argument that the world economic situation is in terrible shape and the unemployment rate is the highest it has been in decades. Everyone is wondering what can he/she do to improve his/her current economic situation when the economy looks so bleak. The stock market and mutual funds perform so badly that many people have fled from them trying to save as much of their asset value as they possibly can. They seek other places to invest their money and oftentimes park it in money market accounts and/or savings accounts, each paying paltry yields of 2% or less (usually less) return on their money.

Tax Certificates and Tax Deeds are another matter, with proven double digit and considerably much higher returns on initial investments. The best part about owning Tax Certificates and ultimately Tax Deeds is you are in full control or as much control of your money as you desire. There are many avenues to purchase Tax Certificates and Tax Deeds. Many states have legislation set in place allowing their respective counties to sell them.

Tax Certificates are liens placed on properties by the county the properties are located in for non payment of property taxes. As such the lien(s) are in first position ahead of bank loans and other liens placed on the property. This affords the buyer/investor (anyone with a Social Security number or a Tax ID number) a very sizable return on their investment and giving them a great deal of protection as the value of Tax Certificate(s) are approximately 1% +/- of the value of the property.

Tax Deed applications are the next step in acquiring property for non payment of property taxes. After a certain period of time an investor can (and should) apply for the Tax Deed(s) on the Tax Certificate(s) he/she owns. Oftentimes this can be done from the comfort of your home online computer. If the property owner or any other interested party does not pay the past due property taxes (your Tax Certificate plus all the stated interest due you plus other costs you incur), then you (the investor) would very likely own the property for a very small price in relation to the property value. Selling the Tax Deed is a very easy process as there are a large number of investors desiring to acquire the properties at a fraction of the true value.

For free information to learn more about Florida Tax Certificates and Tax Deeds please contact me at: http://www.taxcertificates4sale.com or email: taxman813777@yahoo.com